Patients from 12 to 35 years old with type I diabetes mellitus proved by anti-pancreatic beta cell antibodies and recently diagnosed (less than 6 weeks) will be included in this study. Peripheral blood hematopoietic stem cells will be mobilized from bone marrow of the patient with cyclophosphamide plus G-CSF (granulocyte-colony stimulating factor), collected by leukapheresis and cryopreserved. After 2-3 weeks, high dose immunosuppression is given (cyclophosphamide 200 mg/kg plus rabbit antithymocyte globulin 4.5 mg/kg) and stem cells are thawed and injected intravenously. This procedure is performed in isolated rooms at the Bone Marrow Transplantation Unit of the School of Medicine of Ribeirão Preto, University of São Paulo, Brazil. Patients are discharged from the hospital after engraftment and closely followed up to 2 months after transplantation (with at least weekly outpatient visits) and continue the followup for 5 years after transplantation. Clinical, hematological, metabolical and immunological evaluations are performed to analyse the effect of the transplant in the disease and in the hematopoetic and immunologic systems of the body. Patients fitting the inclusion criteria but not agreeing to perform the transplantation are the control group and they will be followed in parallel with transplanted patients.